Great Value Storage files for bankruptcy to stop foreclosure

Filing follows ruling that lender could proceed with foreclosure sale

Nate Paul of World Class Holdings (Facebook/GreatValueStorage, iStock)
Nate Paul of World Class Holdings (Facebook/GreatValueStorage, iStock)

Nearly two years after the FBI raided the offices of Great Value Storage’s founder, the company has filed for bankruptcy.

The firm, led by Austin-based developer Nate Paul, went the Chapter 11 route in Delaware last week. The filing comes just weeks after a New York judge ruled that a lender could proceed with a foreclosure sale tied to 64 of the company’s self-storage facilities.

Paul and his upstart real estate empire made national news when the FBI raided the offices of his company World Class Holdings and his personal residence in 2019.

That same year, one of Paul’s largest companies, Great Value Storage, defaulted on an $82 million mezzanine loan from Teachers Insurance Annuity Association of America. The company also allegedly failed to produce financial statements or provide a reason for its defaults, according to an affidavit from TIAA.

The lender tried to schedule a foreclosure sale for early September. But a judge ruled the sale commercially unreasonable because it was to be held on the Friday before Labor Day during a pandemic.

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TIAA then sought to schedule a foreclosure sale for March 10. Just two days before that date, however, TIAA sold the loan to RREF Storage. Great Value Storage attempted to stop the sale, but the judge ruled against the self-storage company in late March.

The Austin Business Journal first reported news of the bankruptcy.

The self-storage company reported having $100 million to $500 million in assets and between $50 million and $100 million in liabilities, according to bankruptcy filings.

Last year, Paul lost four Austin properties to foreclosure. He is also the center of a whistleblower complaint brought against Texas Attorney General Ken Paxton. Four former employees of Paxton claim they were fired for meeting with the FBI and telling the agency that Paxton abused his powers to help substantiate Paul’s claim that the FBI raid on his home was improper.

The developer once claimed to have a real estate portfolio worth over $1 billion and in 2016 was a member of Forbes “30 Under 30.”

World Class Holdings and Paul’s bankruptcy attorney in Delaware did not immediately return requests for comment.